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European Council Endorses Exchange Of Beneficial Ownership Data

by Ulrika Lomas, Tax-News.com, Brussels

14 November 2016


The European Council has endorsed a proposal to grant tax authorities access to information held by authorities responsible for the prevention of money laundering.

Where a financial account holder is an intermediary structure, financial institutions are required by EU Directive 2014/107/EU to report the entity's beneficial ownership. Applying that provision relies on information held by authorities responsible for the prevention of money laundering, pursuant to Directive 2015/849/EU.

The Council said: "Access to that information will ensure that tax authorities are better equipped to fulfill their monitoring obligations. It will thus help prevent tax evasion and tax fraud."

The proposal is one of a number of measures set out by the European Commission in July 2016, in the wake of the Panama Papers leak. It will apply from January 1, 2018.

According to the Commission, the measure "will ensure that tax authorities must be given access to the data provided under the EU's anti-money laundering rules, notably customer due diligence information and the information in their national beneficial ownership registries, in order to perform their tasks and not only in the context of the fight against money laundering and terrorist financing."

"Indeed, the fact that member states currently have the choice of whether or not to give access to this information to tax authorities limits the effectiveness of tax audits. With access to this information, tax authorities will be able to identify the person behind an opaque company, structure, or entity, and react quickly to situations of tax evasion and avoidance."

The Council will formally adopt the directive once the European Parliament has given its opinion.

TAGS: compliance | tax | European Commission | tax compliance | tax avoidance | audit | offshore | European Union (EU) | Panama | Europe | Tax | Tax Evasion

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